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DVYE And SDEM: Emerging Market Equity ETFs With Strong 6.5%-7.9% Dividend Yields

Published Fri, 30 Oct 2020 22:28:29 -0400 on Seeking Alpha

Seeking AlphaETF AnalysisDVYE And SDEM: Emerging Market Equity ETFs With Strong 6.5%-7.9% Dividend YieldsOct. 30, 2020 10:28 PM ET|| About: iShares Emerging Markets Dividend ETF (DVYE), SDEMby: Juan de la HozJuan de la Hoz CEF/ETF Income LaboratoryCEF/ETF income and arbitrage strategies, 8%+ portfolio yieldsSummaryEmerging market equities are trading at historically low prices and valuations.
DVYE and SDEM focus on emerging markets equities with high dividend yields.
The funds offer investors both strong dividends and the possibility of substantial capital gains, dependent on economic conditions.
Emerging markets equities offer international diversification, strong dividend yields, and the potential for substantial capital gains due to their low prices, cheap valuations, and the relative strength of the dollar. Risks are higher than average, with dividends and returns strongly dependent on underlying economic conditions. The Global X SuperDividend Emerging Markets ETF (SDEM) and the iShares Emerging Markets Dividend ETF (DVYE) are both emerging market high dividend equity index funds, provide investors with an easy and cheap way to access these securities, and are strong buys.
DVYE is more diversified and yields 6.5%, while SDEM has fewer holdings but yields 7.9%. Both funds are remarkably similar otherwise, so interested investors should choose SDEM if they prefer the stronger yields, DVYE if they want a more diversified, less risky fund.
Funds Overview
SDEM and DVYE both invest in emerging market high dividend yield stocks. SDEM invests in the top 50 highest yielding stocks in the MSCI Emerging Markets Index, while DVYE invests in the top 100 in the Dow Jones Emerging Markets Select Index.
Index methodologies are remarkably similar, with both focusing on emerging market equities that meet a very basic set of liquidity, trading, etc., criteria. As such, both funds have remarkably similar holdings, performance, and characteristics. What is true for... Read more